Sponsors (4)
The bill strengthens U.S. drug supply resilience and reduces shortage risk by funding domestic capacity and maintaining six‑month reserves, but it raises federal spending and could increase drug procurement costs and prices by favoring domestic/OECD sourcing and imposing reserve-related costs on suppliers.
Hospitals and patients (especially those with chronic conditions) will be less likely to experience critical drug and API shortages because the bill requires a maintained and regularly replenished six‑month domestic/OECD reserve.
Hospitals and patients benefit from a more resilient U.S. drug supply because the bill prioritizes domestic manufacturing, allows OECD sourcing, and encourages surge capacity in federal contracting.
Taxpayers and local economies may gain jobs and increased domestic production because the bill provides federal capital ($500 million in FY2026) to build or renovate non‑federal manufacturing capacity.
Patients and hospitals may face higher drug prices or reduced manufacturer margins because suppliers will likely incur higher compliance and inventory costs to maintain six‑month reserves.
Taxpayers, hospitals, and purchasers could face higher procurement costs because the bill's preference for domestic or OECD sourcing and domestic manufacturing may reduce participation by lower‑cost foreign suppliers and limit competition.
Taxpayers bear a direct federal cost (at least $500 million in FY2026) and may face additional appropriations for ongoing reserves and contracting support.
Based on analysis of 2 sections of legislative text.
Creates HHS contracts to maintain a rolling six‑month reserve of critical drugs and APIs with replenishment, domestic/OECD storage preference, and Secretary-directed production/allocation.
Introduced June 12, 2025 by Gary C. Peters · Last progress June 12, 2025
Creates a federal contract program requiring eligible manufacturers and establishments to hold a rolling reserve of critical drugs and their active pharmaceutical ingredients (APIs) with vulnerable supply chains. The Department of Health and Human Services must publish the list of covered drugs/APIs, require a baseline six‑month supply (or other reasonable quantity) stored domestically or at qualified OECD-registered facilities, require regular replenishment with recently made product, and retain the authority to direct production or transfer of reserve stock when needed. The law directs HHS to prioritize awards that rely on domestic manufacturing or sourcing from OECD countries, to issue guidance within 180 days on how to identify vulnerable drugs/APIs and eligibility criteria, and to include post-award requirements such as excess capacity, redundancy, and quality systems in agreements with reserve-holding entities.